The 17-Year-Old That Yahoo Paid $30M Was Licensing His Startup's Core Technology
sfgate.com
sfgate.com
Yahoo doesn't get the technology from the transaction (summly doesn't own it). Yahoo doesn't get any particular talent on the transaction (there isn't a team of tech wizards they're buying for that 30million). They're not getting a huge number of users (tons of apps have a million users - still a drop in the ocean on Yahoo's own user numbers). So what is this deal all about?
Some enterprising reporter should
1. Look at where the money was raised,
2. who is on the board (or in the decision process chain)
3. Find out where they are a limited partner.
I'm gonna guess there is some overlap.
Marissa isn't looking too impressive with this one.
30 million is not that expensive for advertising, and pretty much every local news show covered the story of the amazing 17 year old start up founder who was acquired by Yahoo.
But in reality I don't think Yahoo is that cunning, I think they actually are just clueless.
"Publishers have been tremendously supportive, and we've already
signed a deal with News Corporation," says D'Aloisio.
Likewise, one's perception of the value of those user's selection among news items might be valued differently than another user group's selection among flatulence noises...particularly if one's revenue was anchored in advertising as is the case with Yahoo.
To put it another way, assuming that Yahoo is run by incompetents is more likely to be an error than its converse.
Has anyone actually _confirmed_ that Yahoo paid $30M? As in, seen an official statement or reviewed the actual deal docs? Because as of now it seems like the only actual source for that number is Kara Swisher on AllThingsD, and that's her saying "sources tell her".
I ask because I wonder if one of the big twists in this story is that, perhaps, Yahoo didn't actually pay $30M. Maybe they paid $10M. Or $1M. And perhaps this whole shebang is a big, big PR blitz -- that's working spectacularly.
Folks pay $2M for 30 seconds of Super Bowl ad time. This story has, so far, gotten Yahoo a LOT more than 30 seconds of exposure. It's everywhere (my extremely non-technical and non-nerdy biz partner emailed me an AP news link this morning - he's my "masses" filter).
One question I have is - what would the consequences be if they did leak an incorrect amount? I mean, would shareholders have a right to be upset? "You leaked to the world that we paid $30M and in reality, we...we...got a better deal? Oh. Cool."
It reminds me of a joke I have with some friends about an acquisition someone did a few years ago. They announced the deal as being priced at "Under $50M", and the news reported and celebrated this $50M acquisition. Now friends say things like "I, too, happen to have Under $50M in my wallet at this very moment!" ;)
Stop over analyzing, it's not a regular startup, it's not playing the same ballgame you or I play. No value was required. The usualy rules do not apply.
Daddy hooked his fish.
Analyst - college graduate - 2 year program) Associate - MBA graduate or promoted Analyst - lasts 2-3 years VP - promoted associate (minium 5 year experience in the industry) Director - promoted from VP (after a few years)
Managing Director - promoted from Director. These are the real rain-makers who earn a lot. Still - the firm promotes roughly 200-250 directors per year. Total number of MDs is probably a few thousand.
So - saying that someone is a VP really means nothing.
Edit: "his father works in commodities for Morgan Stanley..." http://www.telegraph.co.uk/technology/9885632/Nick-DAloisio-...
And now I'm going to do something actually productive.
Supposedly the Spock-like logical minds of HN are immune to the wunderkind mass media story hook; so what gives?
By the way: None of this is meant to take anything away from
what founder Nick D'Aloisio did with Summly. That guy is a pure
hustler, and he earned every penny of his millions.
Maybe Yahoo has decided spending $30 million to give one of
their disappointing startups a safe landing is a way to get on
their good side.
>"he was in the right place at the right time with the right investors"
What's the difference between these two?
If you count his work as being building the original application, creating a brand and then being involved with the business that was sold then the company being bought only because of the investors means his work was immaterial to the sale.
"The acquisition was led by Yahoo HR boss Jackie Reeses."
HR is leading investment decisions at Yahoo? I looked up this person and she is based in New York and her title is EVP People and Development at Yahoo!
I.e. they somehow forgot to check the actual technology.
The more I read about this, the more I think this could be the case.
As Peter Thiel says there are two kinds of companies: companies who go from 0 to 1 (SpaceX, Tesla, maybe Google) and companies who go from 1 to n (globalization of technology).
Summly clearly fits into the 1 to n bucket, but so do a lot of other companies. Would people be pissed if Github got acquired? I see no outcry for a $100 million dollar round of funding for a company that is built upon open source software.
How is github any different than Summly from a 'renting' of technology perspective?
The core of Github is open source, which allows for interoperability and confidence, but what they have built on top is proprietary and community-engaging. Just like managing email infrastructure, there is a lot of nuance and domain expertise that comes from experience only. Come to think of it, it seems a lot of open source technology is so loosely built (configurable/ flexible), that it requires serious expertise to actually run it.
Are you kidding? Github has global visibility, and is the absolute leader in the open source software hosting vertical.
From a "renting" of technology perspective, they are not that different. From a "large customer base" perspective, which was also mentioned in the article, they are complete opposites.
"Despite speculation on the Internet that Summly only licensed its summarizing technology from SRI International, an independent research institute, Mr. D’Aloisio said the technology was developed by Summly and that the company owned 100% of the intellectual property behind the service."
http://blogs.wsj.com/tech-europe/2013/03/26/what-does-30-mil...
Launch coverage: http://techcrunch.com/2012/11/01/summly-app-nick-daloisio-vi... http://gigaom.com/2012/10/31/summly-wants-to-make-news-summa... http://www.theverge.com/2012/11/1/3583720/summly-nick-d-aloi... "Summly uses a combination of natural language processing and 'rocket science' from the famed scientists at the Stanford Research Institute (SRI) to pick out only what's important from news articles"
http://summly.com/technology.html
Summly's internal team partnered closely with SRI in building our app.
Innovations from SRI International have created new industries, billions of dollars of marketplace value, and lasting benefits to society—touching our lives every day. SRI, a nonprofit research and development institute based in Silicon Valley, brings its innovations to the marketplace through technology licensing, new products, and spin-off ventures. Government and business clients come to SRI for pioneering R&D and solutions in computing and communications, chemistry and materials, education, energy, health and pharmaceuticals, national defense, robotics, sensing, and more. Visit sri.com for more information.
"Summly came to SRI International with a core concept to solve the information overload problem, which is especially challenging for mobile devices because of their limited screen size," said David Israel, Ph.D., program director in the Artificial Intelligence Center at SRI International. "Building on SRI's expertise in machine learning and natural language processing, the Summly team is creating a new type of content, providing understandable and relevant summaries tailored for mobile devices."
I'm waiting for them to patent it and then sue newspapers for using headlines.
https://www.keenskim.com/static/KeenSkim_iPhone_app.htm - sign-up for reminder when ready